Implementing the Omnibus Trade and Competitiveness Act of 1988 and Related International Trade Matters

This executive order delegates presidential authorities under the Omnibus Trade and Competitiveness Act of 1988 to various cabinet officials and agencies, establishes sanctions against Toshiba and Kongsberg for illegal technology transfers, creates an Interagency Group on Countertrade and a National Commission on Superconductivity, and mandates a report on semiconductors, fiber optics, and superconducting materials for the FY1990 budget.

54 FR 779

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Impact dates

Dec 27, 1991
Three-year procurement and import sanctions expire
Dec 27, 1989
National Commission on Superconductivity disbands
Dec 27, 1989
Annual defense expenditure report due (ongoing obligation)
Feb 23, 1989
National Commission on Superconductivity report due to President and Congress
Dec 28, 1988
EO takes effect; sanctions period begins

Key directives

Delegate trade negotiation functions to USTR across multiple statutory sections
Establish Interagency Group on Countertrade with Commerce Secretary as chair
Impose 3-year procurement ban on Toshiba Machine Company, Kongsberg Trading Company, Toshiba Corporation, Kongsberg Vaapenfabrikk
Impose 3-year import prohibition on products from Toshiba Machine Company and Kongsberg Trading Company
Delegate exception authority for sanctions to Defense (defense articles), Treasury (imports), and agency heads (procurement)
Secretary of Defense to prepare annual report on defense expenditure increases from illegal technology transfers
Secretary of State delegated authority for Foreign Corrupt Practices Act international agreement functions
Secretary of Commerce to prepare FY1990 budget report on semiconductors, fiber optics, superconducting materials, and advanced manufacturing
Establish National Commission on Superconductivity with max 24 members
National Commission on Superconductivity to report by February 23, 1989
National Commission on Superconductivity to disband within one year
Delegate Buy American Act functions to Defense Secretary

Timeline

Immediate

EO takes effect December 28, 1988 at 12:01 a.m.
Three-year procurement and import sanctions against Toshiba and Kongsberg begin

Near term (90d)

National Commission on Superconductivity report due February 23, 1989 (58 days from signing)
Agencies must provide FY1989/FY1990 program information to Commerce for semiconductor/fiber optics/superconducting materials report

Long term

Three-year sanctions period runs through December 27, 1991
National Commission on Superconductivity disbands by December 27, 1989
Annual defense expenditure reports due from Secretary of Defense ongoing

Risks & tensions

Sanctions against Toshiba/Kongsberg may disrupt legitimate defense and technology supply chains; exception process creates administrative burden and potential for inconsistent application
Vague 'to the extent possible' language in Section 5-401 regarding international institution strengthening lacks enforcement mechanism
Coordination requirements across numerous agencies (Commerce, Defense, State, USTR, OMB, etc.) for semiconductor report may cause delays or interagency conflict
FY1990 budget timeline for semiconductor/fiber optics report implies compressed schedule given December 1988 signing date
Commission's 58-day reporting deadline (Feb 23, 1989) is exceptionally tight for comprehensive policy recommendations on superconductivity
Unclear whether 'within a year' for Commission disbandment means 365 days or calendar year 1989